(Yicai Global) June 28 -- Major shareholders in China Vanke Co. [SHE:000002] upped the stakes in a protracted struggled for control of China's biggest property developer by demanding its entire 12-member board, including celebrity founder and chairman Mr. Wang Shi, stand down.
Shenzhen Jushenghua Co. and Foresea Life Insurance Co., Vanke's third- and fifth-largest investors, proposed an extraordinary general meeting for June 26 at which they sought and failed to depose the Shenzhen-based company's top management.
The struggle for control of blue-chip company has been one of the biggest corporate news stories in China. Shenzhen Baoneng Investment Group Co., which controls Jushenghua and Foresea Life, has been snapping up shares in Vanke since last July, becoming its biggest investor in December with a 20 percent stake.
Mr. Wang, Vanke's chairman, has described Baoneng's buying spree as an act of "barbarians at the gates," and has been trying to thwart the insurance and investment giant's hostile takeover bid. In early March, Vanke said it would issue new shares to Shenzhen Metro Group Co. in a move designed to scupper Baoneng's unsolicited takeover.
On June 17, Vanke announced a plan to issue 2.87 billion A-shares worth CNY45.6 billion to Shenzhen Metro, making the subway operator its majority shareholder and diluting the equity of existing stockholders. On June 22, the Shenzhen Stock Exchange asked Vanke for clarification.
Vanke's A-shares have been suspended from trading on the Shenzhen market since December. Its Hong Kong-listed stock fell 4 percent at the noon close on June 27, reaching HKD16.04, the lowest level in over four months.
Facing a dilution of its 15.24 percent stake in Vanke, China Resources Co. is standing together with Baoneng Group in opposing the new plan. China Resources is Vanke's second-largest shareholder and has good relations with its management.